Vehicle Technology and Aviation Bill

Written evidence UK Petroleum Industry Association (VTAB 12)

Sub-section ‘Electric vehicles’

About the UK Petroleum Industry Association

1. The UK Petroleum Industry Association (UKPIA) represents eight oil refining and marketing companies who own and operate the six crude oil processing refineries in the UK: BP, Essar, ExxonMobil, Petroineos, Phillips66, Shell, Total and Valero. In addition to refining, UKPIA members collectively are the largest importers of fuel into the UK and source around 85% of UK inland consumption of oil products.

2. We are submitting evidence because we want to help ensure that text in part 2, paragraph 10 of the proposed bill does not have unintended consequences on larger fuel retailers, and further information is given in the points which follow.

3. Our key messages are:

a. UKPIA is strongly of the opinion that these points should only be provided at locations where they are most useful to the consumer and commercially viable for the provider.

b. A ‘prescribed description’ is very difficult to define without unintended consequences since every fuel retail station is very different in layout, physical size, geographic location and ownership.

4. We recommend therefore that the reference in the bill to ‘large fuel retailers’ is removed.

Further comments on the Vehicle Technology and Aviation Bill – Part 2, Paragraph 10

5. Part 2, paragraph 10 of the proposed bill may impose requirements on large fuel retailers, within a prescribed description, to provide public charging points (both electrical charging and hydrogen refuelling points).

6. We do appreciate that the intention is that these measures could only be brought into effect with secondary legislation proposed at a later date, and only if they were deemed necessary to meet Government’s objectives for the ULEV market.

7. UKPIA is strongly of the opinion that these points should only be provided at locations where they are most useful to the consumer and commercially viable for the provider. While that could be at some fuel retail stations, there are many other locations which should also be considered.

8. A ‘prescribed description’ is very difficult to define without unintended consequences since every fuel retail station is very different in layout, physical size, geographic location and ownership. Some are inner city and some are in rural locations. For example, high fuel volume does not necessarily mean largest physical size, there are some relatively high volume sites with very low plot areas and vice versa. In larger volume retail sites, it is most likely that all of the plot area is already fully utilised and any additional equipment might mean a full site knockdown and rebuild (KDRB) to accommodate any new facilities if indeed they can be re-designed.

9. Typically, a KDRB can cost upwards of £1m and therefore the cost to the site operator is potentially much more than the cost of any new infrastructure equipment in isolation. Further, the site will need planning permission to cover the proposed changes which is not easy to obtain particularly when hazardous products are involved and the approach applied by the authorities across the UK is usually not consistent.

10. Such proposals may inadvertently lead to increased market exit and reconsideration of viability of fuel retailing, particularly for those filling stations already facing increasing challenges of a tough economic climate, high overheads and declining volumes of fuels sold.

11. Therefore, the differentiation of retail sites is not obvious and can only be done on a ‘fit for purpose’ criteria which is only known to the site operator.

12. For these reasons, and in our view, infrastructure is not something to be mandated at retail stations and remains a market and commercial matter for each site operator. This point is well illustrated by the experience of Norway which has by far the largest proportion of electric vehicles of any European countries. Here, despite the lack of a mandate on fuel retailers to introduce electric vehicle recharging points, a number of fuel retailers have seen a commercial opportunity to install them.

March 2017

 

Prepared 23rd March 2017